Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-278207
Prospectus Supplement
(to Prospectus dated May 15, 2024)
SUPPLEMENT TO
PROSPECTUS FOR
UP TO 30,183,800 CLASS A ORDINARY SHARES
BITFUFU INC.
Recent Developments
This prospectus supplement, together with the prospectus dated May 15, 2024 (the “Prospectus”), relate to, among other things, the issuance from time to time of up to 5,589,292 Class A Ordinary Shares and the resale from time to time by the selling shareholders named in this prospectus or their permitted transferees of (a) up to 24,594,508 Class A Ordinary Shares; (b) up to 155,541 Class A Ordinary Shares issuable upon the exercise of 207,389 Warrants; and (c) up to 207,000 Class A Ordinary Shares issuable upon the exercise of the Unit Purchase Option.
May 20, 2024
First Quarter 2024 Operational Highlights
| ● | Hosting capacity of 644 MW diversified across 29 sites on three continents, compared with 513 MW across 22 sites on one continent during the same period of 2023 |
| ● | Total mining capacity under management increased 52.1% to a record 28.6 EH/s, compared to 18.8 EH/S during the same period of 2023 |
| ● | Cloud-mining registered users increased 63.5% to 321,184 as of March 31, 2024, compared to 196,468 as of March 31, 2023 |
| ● | Bitcoin (“BTC”) production from self-mining operations decreased 11.0% to 1,103 BTCs from 1,239 BTCs in the same period of 2023 |
| ● | BTC production by customers from cloud-mining solutions increased 53.0% to 2,096 BTCs, compared with 1,370 BTCs in the same period of 2023 |
| ● | Cost to mine BTC from self-mining operations averaged US$39,182 per BTC versus US$21,908 per BTC in 2023 |
| | | As of March 31, | |
| | 2024 | | | 2023 | |
| Metric | | | | | | |
| Hosting capacity (MW) | | | 644 | | | | 513 | |
| Total mining capacity under management (EH/s) (1) | | | 28.6 | | | | 18.8 | |
| Cloud-mining registered Users | | | 321,184 | | | | 196,468 | |
| | | Three Months Ended March 31, | |
| | | 2024 | | | 2023 | |
| BTC Produced | | | | | | |
| From BitFuFu self-mining operations | | | 1,103 | | | | 1,239 | |
| By customers from cloud-mining solutions (2) | | | 2,096 | | | | 1,370 | |
| Average BTC produced per day by customers and BitFuFu | | | 35.5 | | | | 29.3 | |
| (1) | Defined as the hash rate that could theoretically be generated if all miners that have been energized are currently in operation including miners that may be temporarily offline. Hash rates are estimates based on the manufacturers’ specifications. |
| (2) | Defined as the amount of BTC that was produced during the period by customers using mining capacity purchased from cloud-mining solutions. |
First Quarter 2024 Financial Highlights
| ● | Total revenue was US$144.4 million, representing an increase of 149.0% from US$58.0 million in the same period of 2023 |
| ● | Revenue from cloud-mining solutions was US$81.5 million, an increase of 181.0% from US$29.0 million in the same period of 2023 |
| ● | Revenue from Bitcoin self-mining operations was US$60.1 million, an increase of 117.0% from US$27.7 million in the same period of 2023 |
| ● | Net income was $35.3 million, compared to US$2.7 million in the same period of 2023 |
| ● | Adjusted EBITDA (non-GAAP) was US$49.9 million, an increase of 430.9% from US$9.4 million in the same period of 2023 |
| ● | Combined balance of cash, cash equivalents, and digital assets1 were US$163.7 million as of March 31, 2024, compared with US$76.0 million as of December 31, 2023. |
| 1 | The Company has early adopted the new FASB Accounting Standards Update (ASU) No. 2023-08, Accounting for and Disclosure of Crypto Assets on January 1, 2024. Under the new standard, the Company’s Bitcoin ("BTC") holdings are measured at fair value, with changes in fair value recognized in the Company's income statement. |
First Quarter 2024 Financial Results
Revenue
Total revenue in the first quarter of 2024 was US$144.4 million, representing an increase of 149.0% from US$58.0 million in the same period of 2023, primarily driven by growth in cloud-mining solutions and self-mining operations.
Revenue from cloud-mining solutions in the first quarter of 2024 was US$81.5 million, representing an increase of 181.0% from US$29.0 million in the same period of 2023, primarily due to increases in repeat purchases of cloud-mining services from existing and new customers, and an increase in the average selling price. In the first quarter of 2024, revenue from existing customers was US$76.0 million and new customers was US$5.5 million, accounting for 93.0% and 7.0% of revenue from cloud-mining solutions, respectively. In the first quarter of 2023, revenue from existing customers of US$28.1 million and new customers of US$0.9 million, accounting for 96.9% and 3.1% of revenue from cloud-mining solutions of that period, respectively.
Revenue from Bitcoin self-mining operations in the first quarter of 2024 was US$60.1 million, representing an increase of 117.0% from US$27.7 million in the same period of 2023. The increase was primarily driven by the optimization of mining operations and favorable market conditions including a 70.0% year-over-year increase in the average hash rate used for self-mining and a 134.0% year-over-year increase in the average price of BTC, which was partially offset by an increase in blockchain difficulty for BTC mining resulting in a decrease in BTC output per tera-hash. BTC production from self-mining operations decreased 11.0% to 1,103 BTCs, from 1,239 BTCs in the same period of 2023, as a result of the increase in blockchain difficulty for BTC mining.
Revenue from hosting services and others in the first quarter of 2024 was US$2.1 million, representing an increase of 61.5% from US$1.3 million in the same period of 2023, primarily due to lower uptime of hosted miners during first quarter of 2023 as a result of the relocation of hosted miners during that period.
Revenue from sales of mining equipment in the first quarter of 2024 was US$0.7 million, compared to no revenue from in the same period of 2023.
In the first quarter of 2024, cloud-mining solutions accounted for 56.4% of total revenue, Bitcoin self-mining operations accounted for 41.6%, and hosting services and others accounted for 2.0%.
Cost of Revenue
Cost of revenue in the first quarter of 2024 was US$122.7 million, representing an increase of 120.7% from US$55.6 million in the same period of 2023, primarily due to an increase in costs associated with the expansion of the Company's cloud-mining solutions and self-mining operations, in line with the corresponding increase in revenue over the same period.
Operating Expenses
Sales and marketing expenses in the first quarter of 2024 were US$0.4 million, flat when compared to US$0.4 million in the same period of 2023. Despite the 181.0% year-over-year increase in revenue from cloud-mining solutions, the Company did not increase spending on advertising and promotional activities during the quarter due to strong market demand.
General and administrative expenses in the first quarter of 2024 were US$1.9 million, representing an increase of 111.1% from US$0.9 million in the same period of 2023, primarily due to a US$1.2 million increase in legal and other consulting expenses associated with the Company's public listing on NASDAQ in March 2024 and other business development activities.
Research and development expenses in the first quarter of 2024 were US$0.4 million, representing a decrease of 20.0% from US$0.5 million in the same period of 2023, primarily due to a decrease in payroll costs to technical and development employees.
There were no impairment losses on digital assets during the quarter, compared to US$1.7 million during the same period of 2023.
Starting from January 1, 2024, the Company implemented the early adoption of FASB fair value accounting rules, ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets. The Company recognized a fair value gain on BTC of US$11.8 million that has yet to be realized as of March 31, 2024.
Gain on sales of digital assets in the first quarter of 2024 was US$13.1 million, representing an increase of 191.1% from $4.5 million during the same period of 2023. The increase was primarily due to the increase in the volume of BTC sold. The remaining BTC the Company holds will be retained for further potential capital appreciation, reflecting the Company’s careful and strategic management of its digital asset portfolio and ability to capitalize on favorable market conditions.
Net Income
Net income in the first quarter of 2024 was US$35.3 million, compared with US$2.7 million in the same period of 2023.
Earnings per Share
Earnings per basic and diluted ordinary share were US$0.23, compared to US$0.02 in the same period of 2023.
Adjusted EBITDA
Adjusted EBITDA in the first quarter of 2024 was US$49.9 million, compared with US$9.4 million in the same period of 2023, of which US$11.8 million was attributed by an unrealized fair value gain on BTC due to the early adoption of FASB fair value accounting rules, ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets.
Liquidity and Capital Resources
As of March 31, 2024, the Company had cash, cash equivalents and digital assets of US$163.7 million, compared with US$76.0 million as of December 31, 2023. The increase was mainly due to the funds raised in connection with its business combination and listing on NASDAQ in March 2024 and the fair value gain on BTC driven by the increase in BTC price.
Non-GAAP Financial Measure
BitFuFu uses and considers Adjusted EBITDA, a non-GAAP financial measure, as a supplemental metrics in reviewing and evaluating its performance. BitFuFu defines Adjusted EBITDA as (1) GAAP net profit/loss, plus (2) adjustments to add back/(subtract) interest expense/(income), income tax expense/(benefit), depreciation and amortization; and (3) adjustments for non-recurring items, if any. BitFuFu believes that this non-GAAP financial measure provides useful information to investors and others in understanding and evaluating the consolidated financial results in the same manner as its management and in comparing financial results across accounting periods. However, Non-GAAP financial measure is not defined under GAAP and are not presented in accordance with GAAP. Non-GAAP financial measure has limitations as analytical tools, which possibly do not reflect all items of expense that affect the Company’s operations. BitFuFu’s calculation of adjusted EBITDA may be different from the calculation methods of other companies, and therefore, the comparability of such measure may be limited. In addition, this non-GAAP financial measure adjusts for the impact of items that BitFuFu does not consider indicative of the operational performance of its business and should not be considered in isolation or construed as an alternative to net profit/loss or any other measure of performance or as an indicator of its future performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
For more information on the non-GAAP financial measure, please see the table captioned “Unaudited Reconciliation of GAAP and non-GAAP Results” set forth at the end of this prospectus supplement.
Forward-Looking Statements
This prospectus supplement includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. These statements are based on various assumptions, whether or not identified in this prospectus supplement, and on the current expectations of BitFuFu’s management and are not predictions of actual performance. These statements involve risks, uncertainties and other factors that may cause BitFuFu’s actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by these forward-looking statements. Although the Company believes that it has a reasonable basis for each forward-looking statement contained in this prospectus supplement, the Company cautions you that these statements are based on a combination of facts and factors currently known and projections of the future, which are inherently uncertain. The announced results of the first quarter of 2024 are preliminary and subject to adjustments. All information provided in this prospectus supplement is as of the date of this prospectus supplement and the Company does not undertake any duty to update such information, except as required under applicable law.
BITFUFU INC.
STATEMENTS OF COMPREHENSIVE INCOME
| | | Three months ended March 31, | |
| | | 2024 | | | 2023 | |
| | | US$ ‘000 | | | US$ ‘000 | |
| | | | | | | |
| Total revenues | | | 144,411 | | | | 57,969 | |
| | | | | | | | | |
| Cost of revenues | | | | | | | | |
| Cost of revenues incurred to a related party | | | (45,298 | ) | | | (40,099 | ) |
| Cost of revenues incurred to third parties | | | (71,348 | ) | | | (9,445 | ) |
| Cost of revenues – depreciation and amortization | | | (6,097 | ) | | | (6,030 | ) |
| Total cost of revenues | | | (122,743 | ) | | | (55,574 | ) |
| | | | | | | | | |
| Gross profit | | | 21,668 | | | | 2,395 | |
| | | | | | | | | |
| Operating expenses | | | | | | | | |
| Sales and marketing expenses | | | (383 | ) | | | (423 | ) |
| General and administrative expenses | | | (1,934 | ) | | | (891 | ) |
| Research and development expenses | | | (391 | ) | | | (483 | ) |
| Impairment loss on digital assets | | | - | | | | (1,719 | ) |
| Unrealized fair value gain of Bitcoins | | | 11,758 | | | | - | |
| Realized gain on sales of digital assets | | | 13,089 | | | | 4,525 | |
| Total operating expenses, net | | | 22,139 | | | | 1,009 | |
| | | | | | | | | |
| Operating income | | | 43,807 | | | | 3,404 | |
| | | | | | | | | |
| Interest expense | | | (1,528 | ) | | | (807 | ) |
| Interest income | | | 343 | | | | 410 | |
| Other income/(expenses), net | | | - | | | | 4 | |
| Income before income taxes | | | 42,622 | | | | 3,011 | |
| Income tax (expense)/benefit | | | (7,314 | ) | | | (328 | ) |
| Net income and total comprehensive income | | | 35,308 | | | | 2,683 | |
| | | | | | | | | |
| Earnings per share: | | | | | | | | |
| Ordinary shares – basic and diluted (US$) | | | 0.23 | | | | 0.02 | |
| | | | | | | | | |
| Weighted average shares outstanding used in calculating basic and diluted earnings per share: | | | | | | | | |
| Ordinary shares – basic and diluted | | | 154,395,278 | | | | 150,000,000 | |
| * | The amount was less than $500 |
BITFUFU INC.
CONSOLIDATED BALANCE SHEETS
| | | As of
March 31, 2024 | | | As of
December 31, 2023 | |
| | | US$ ‘000 | | | US$ ‘000 | |
| | | | | | | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | | 87,162 | | | | 32,005 | |
| Digital assets | | | 76,508 | | | | 43,979 | |
| Accounts receivable, net | | | 3,028 | | | | 3,838 | |
| Prepayments | | | 52,314 | | | | 39,566 | |
| Amount due from related parties | | | 14 | | | | 38 | |
| Inventory | | | 303 | | | | - | |
| Other current assets | | | 4,559 | | | | 1,843 | |
| Total current assets | | | 223,888 | | | | 121,269 | |
| | | | | | | | | |
| Non-current assets: | | | | | | | | |
| Equipment, net | | | 75,754 | | | | 81,857 | |
| Deposits | | | 2,683 | | | | 2,683 | |
| Deferred tax assets, net | | | 4,404 | | | | 4,224 | |
| Total non-current assets | | | 82,841 | | | | 88,764 | |
| | | | | | | | | |
| Total assets | | | 306,729 | | | | 210,033 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payables | | | 1,967 | | | | 806 | |
| Contract liabilities | | | 42,438 | | | | 47,724 | |
| Taxes payable | | | 3,218 | | | | 2,233 | |
| Accrued expenses and other payables | | | 5,338 | | | | 5,368 | |
| Amount due to a related party | | | 23,497 | | | | 30,229 | |
| Total current liabilities | | | 76,458 | | | | 86,360 | |
| | | | | | | | | |
| Non-current liabilities: | | | | | | | | |
| Long-term payables | | | 102,435 | | | | 102,435 | |
| Deferred tax liabilities, net | | | 11,397 | | | | 3,904 | |
| Total non-current liabilities | | | 113,832 | | | | 106,339 | |
| | | | | | | | | |
| Total liabilities | | | 190,290 | | | | 192,699 | |
| | | | | | | | | |
| Total shareholders’ equity | | | 116,439 | | | | 17,334 | |
| | | | | | | | | |
| Total liabilities and stockholders’ equity | | | 306,729 | | | | 210,033 | |
BITFUFU INC.
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
| | | Three months ended March 31, | |
| | | 2024 | | | 2023 | |
| | | US$ ‘000 | | | US$ ‘000 | |
| | | | | | | |
| Net profit | | | 35,308 | | | | 2,683 | |
| Add: Interest expenses, net | | | 1,185 | | | | 397 | |
| Add: Income tax expense/(benefit) | | | 7,314 | | | | 327 | |
| Add: Depreciation | | | 6,097 | | | | 6,041 | |
| Adjusted EBITDA | | | 49,904 | | | | 9,448 | |
